As of 11/20/2024
Indus: 43,408 +139.53 +0.3%
Trans: 17,002 -26.31 -0.2%
Utils: 1,055 +1.25 +0.1%
Nasdaq: 18,966 -21.33 -0.1%
S&P 500: 5,917 +0.13 +0.0%
|
YTD
+15.2%
+6.9%
+19.7%
+26.3%
+24.1%
|
 46,000 or 43,000 by 12/01/202418,000 or 16,600 by 12/01/20241,075 or 1,000 by 12/01/202420,000 or 18,400 by 12/01/20246,100 or 5,800 by 12/01/2024 |
As of 11/20/2024
Indus: 43,408 +139.53 +0.3%
Trans: 17,002 -26.31 -0.2%
Utils: 1,055 +1.25 +0.1%
Nasdaq: 18,966 -21.33 -0.1%
S&P 500: 5,917 +0.13 +0.0%
|
YTD
+15.2%
+6.9%
+19.7%
+26.3%
+24.1%
| |
|
46,000 or 43,000 by 12/01/202418,000 or 16,600 by 12/01/20241,075 or 1,000 by 12/01/202420,000 or 18,400 by 12/01/20246,100 or 5,800 by 12/01/2024 | ||
Statistics updated on 8/26/2020.
During research for my book,
Encyclopedia of Chart Patterns
Adam is a term that describes how the top looks, in this case, Adam sports a narrow, pointed top, perhaps with a one-day upward spike. The following Eve top is more rounded looking and wider. If Eve has spikes, they tend to be more numerous and shorter. Many times the difference between Adam and Eve is the width of each over their entire height. Adam tops tend to remain narrow but Eve tops widen over their height. When trying to decide which is which, ask yourself if the two tops appear different or similar. With Adam & Eve, the two should look different (the first narrow and the second wide).
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Overall performance rank (1 is best): 10 out of 36
Break even failure rate: 21%
Average decline: 16%
Pullback rate: 64%
Percentage meeting price target: 54%
The above numbers are based on 651 perfect trades. See the glossary for definitions. |
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More
| Characteristic | Discussion |
| Price trend | Upward leading to the pattern. |
| Shape | Two distinct tops that look different. Adam tops appear first and are narrow, inverted Vs but Eve follows Adam and is more rounded looking and wider than Adam. |
| Valley | The valley drop between the tops should measure at least 10%, but allow exceptions. |
| Top price | The variation between price peaks is small, less than 3%. The two tops should appear to peak near the same price. |
| Separation | The twin peaks are several weeks apart with most falling in 2 to 7 week range. |
| Confirmation | The double top confirms as a true double top once price closes below the valley between the two peaks. |
| Volume | Usually higher on formation of the left peak than the right. |
More
| Trading Tactic | Explanation |
The Measure Rule
|
| Measure rule | Compute the height from the highest peak (point B in the figure to the right) to the lowest valley (A) between the two peaks and then multiply it by the above 'percentage meeting price target.' Subtract the result from the breakout price (A) to get the target (C). Also, see the double top study. for a new price prediction method. | |
| Stop | Place a stop above the Eve peak. The wide and rounded top makes for a good resistance area. The link to the left discusses stop placement. | |
| Price reversal | Price must have something to reverse, so if the rise leading to the double top is small, expect a small decline. | |
| Confirmation | Wait for confirmation -- price to close below the valley floor. If you don't wait, there's a 60% chance that price will continue higher without confirming the double top. | |
| Trend end | If a double top appears after a long-term DECLINE, confirmation of the top may mean that the end of the decline is near (10% to 20% below and a month away). | |
| Trends | A short- to intermediate-term rise leading to the double top results in the best post breakout performance. | |
| Yearly low | For best performance, double tops with breakouts in the lowest third of the yearly price range perform best, but the performance difference with the other ranges is small. | |
| Pullbacks | Pullbacks hurt post breakout performance. The link to the left defines a pullback while this link discusses performance. |
The figure on the right shows an example of an Adam & Eve double top chart pattern. The Adam peak in this example is a one day price spike (to the right of the label) whereas the Eve peak is wider and flatter (left of the label).
The price squiggles confirm as a true Adam & Eve double top when price closes below the confirmation price, shown here as a blue line.
In this example, price winds its way lower to bottom in August, substantially below the confirmation price.
-- Thomas Bulkowski
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